"Credit cards have a higher share in the discretionary category whereas debit cards dominate in routine expenses like utility payments. About 30 per cent of credit card spends are being done online. At least 10-15 per cent of customers use their cards only online, many from smaller cities," the central bank said in a report.

The RBI quoted studies of two major payment networks – MasterCard and Visa.

According to MasterCard, 75 per cent of all card payments are concentrated in top 20 cities with Delhi, Mumbai and their suburbs alone accounting for 43 per cent.

A Visa study reveals that people in the monthly income band of Rs 75,000-100,000 are the most prolific users of electronic cards.

"Card payments form an integral part of e-payments in India because customers make many payments on their card – paying their bills, transferring funds and shopping," said the RBI report on 'Enabling Public Key Infrastructure (PKI) in Payment System Applications'.

Debit cards entered India in 1998 and they currently account for almost 95 per cent of the total number of cards in circulation.

Credit cards have shown relatively slower growth even though they entered the market one decade before debit cards.

A majority of credit card purchases come from expenses on jewellery, dining and shopping, the RBI added.